What’s So Great About a Pension?
A CalPERS pension is a retirement benefit for California public employees, including those who work in schools, local government, and state agencies. Unlike Social Security or a 401(k), a CalPERS pension is a “defined benefit” plan. This means you’ll receive a lifetime monthly payment once you retire.
This benefit is designed to attract and retain talented employees, giving public employers a competitive edge over the private sector. Pensions help protect public service workers in the long term, supporting financial independence and reducing the risk of poverty as they age.
Your CalPERS pension is also one of three main sources of income you can use in retirement, along with Social Security (if you’re eligible) and other savings plans.
Deferred Compensation Plans
Retirement savings plans, also called deferred compensation plans, complement your CalPERS pension, Social Security (if that benefit applies to you), and other savings to provide additional retirement income.
Learn more about your options to save for your future in our article, Enhance Your Retirement: Choose the Right Savings Plan for You.
Reciprocity or Linking Retirement Systems
Reciprocity is an agreement among California public retirement systems that lets you transfer between qualified systems (within six months and without overlapping service) without losing important retirement and benefit rights.
For example, Maria works for the City of Los Angeles and is a member of the Los Angeles City Employees’ Retirement System (LACERS). After five years, she takes a job with the State of California, which is covered by CalPERS. Because both LACERS and CalPERS are qualified public retirement systems in California, Maria can use reciprocity.
She leaves her city job and starts her state job within six months, with no overlap in employment. Thanks to reciprocity, Maria’s years of service with LACERS are recognized by CalPERS when calculating her retirement benefits. This means she can combine her service credit from both systems for eligibility and vesting purposes, and her highest salary from either system may be used to determine her retirement benefit.
Death Benefits
Surviving spouses or partners may be eligible for a monthly allowance or a return of contributions (plus interest). In addition, a one-time death benefit (ranging from $500 to $5,000) is paid to beneficiaries.
Learn more on our Death Benefits page, or in our article, How to Report the Death of a CalPERS Member.
Cost-of-Living Adjustment (COLA)
Most retirees (95.9% in 2026) receive an annual 2% COLA to help their payments keep pace with inflation. This benefit also builds on itself through compounding growth, helping your pension grow over time.